Additionally you need to assess the odds the tenant stays and will renew the option.

Underfunded HOA's mean special assessments and they can kill your cashflow the same way not having proper capex budgets can.

You want to check out the condo fees, how much they have changed over the years, were there any special assessments and what are the condo financials and rules. 

2 bed 1 bath 700 sq ft house - with unfinished basement -  built in 1930 on .25 acres inside city limits, fully fenced with chainlinkAbsentee owner purchased in 2004 for $55,250Unpaid balance $37,086Home in default for $6561 and going to auction in September.Tax assessed value $80,000 (50K of that in the land itself)Zestimate $103 370Needs a new roof - can't get in to look, but I'm sure its a fixer.Although I could, I don't want to purchase it outright.

Condos can be great if you are accounting for potential assessments, maintenance, HOA fees, etc.

I'm under contract to purchase an assessed 3 unit property.

The property cashflows at full asking but 120k above the tax assessed value seems a bit high.

Mine were pretty cut and dry - all vacant, did searches on taxes, liens, assessments, title, deed holders, permits, sellers, etc.

Maybe she will change her mind on debt, but if not, assess together what it is you want and figure out a strategy together that works for both of you. 

Will the assessed value come down to adjust to the purchase price?